Wheat commentary: GASC back as oil sell-off drags wheat down

Wheat futures continued to be sold off Friday as a stronger dollar and a lower oil price dragged prices down, while in the cash market all eyes were on Egypt’s GASC which was back in the market for March wheat.

The selloff across the commodity space saw further losses piled on to wheat, as Chicago SRW lost 1.2% for its front two months and KC HRW was down 1.2% for March and 1.3% for May.

European futures lost 0.5% on both front month contracts to settle at €159/mt and €161.50/mt.

On the cash market, things were slow in the Black Sea as the market stopped to watch Egypt’s GASC and its latest wheat tender, where it eventually bought 460,000 mt from Russia and Romania at an average price of $222.08/mt CFR.

With little appetite to push new business through apparent in Russia, prices weakened $1.25 to $195.25/mt FOB Novorossiysk, reflecting a weaker ruble as buy and sell indications in the market were otherwise heard steady overnight.

APW prices were decreased $1.25 to $235.25/mt FOB Western Australia, with the Australian dollar weakening slightly as inland bid levels were kept steady around AUD 280/mt Friday.

Argentinian offer levels were again unchanged overnight, held at $187/mt for February and $192/mt for March, with a further weakening of the peso against the dollar taking the Agricensus assessment down 50 cents to $183.50/mt FOB Up River.

In other news, after slowing down over the past fortnight, Russian wheat exports were back up to 776,000 mt in the week, according to a release from the ministry of agriculture.

While the ministry put the total wheat export figure from July-January 37% higher year-on-year at 24.5 million mt, local logistics agency RusAgroTrans said wheat exports were up 39% at 24.7 million mt.